“In multiple recent rulemakings, the PTO has silently skipped steps, claimed exemptions from these laws for reasons that are transparently false, or claimed to be exempt for reasons having no basis in the written law.” – Boundy amicus brief
In an amicus brief filed with the U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday, September 16, David E. Boundy is backing Chestek PLLC’s appeal asking the CAFC to vacate a Trademark Trial and Appeal Board (TTAB) judgment that upheld an examiner’s refusal of the mark CHESTEK LEGAL for failure to comply with the U.S. Patent and Trademark Office’s (USPTO’s) “domicile address requirement.” This requirement originates from the USPTO’s proposed rule issued on February 15, 2019, and subsequent final rule published on July 2, 2019. The changes were ostensibly intended to crack down on fraudulent trademark filings, which have posed a significant problem for the Office in recent years, by requiring that foreign applicants engage U.S. counsel.
Skirting Around the APA
However, appellant Chestek PLLC argues that the USPTO’s proposed rule specifically “disclaimed any impact on U.S. applicants and any new reporting requirements,” and that its final rule, issued less than five months later, blindsided trademark applicants by requiring “all trademark applicants, including U.S. applicants, to disclose their domicile address to the PTO.” For individuals, this would mean disclosing one’s residential address and potentially endangering certain types of applicants who may need to keep their home addresses private.
The USPTO’s process violated the Administrative Procedure Act (APA), said Chestek’s opening brief, because it failed to provide notice and comment on the domicile address requirement. The USPTO’s denial of Chestek’s trademark registration was thus arbitrary, capricious and contrary to law, since the regulation at issue was invalid and unenforceable. Chestek laid out the following statement of issues for the CAFC to consider on appeal:
- Whether the domicile address requirement is invalid because it is not a logical outgrowth of the PTO’s notice of proposed rulemaking, which affirmatively repudiated any impact on U.S. applicants and any new reporting requirements.
- Whether the domicile address requirement is arbitrary and capricious where the PTO failed to provide any explanation for its adoption, failed to consider the requirement’s obvious impacts on applicant privacy, and failed to consider obvious alternatives like exempting applicants represented by U.S. counsel.
- Whether the PTO’s denial of Chestek’s trademark application was arbitrary, capricious, or otherwise not in accordance with law.
A Habit of Skipping Steps
In his amicus brief, Boundy, who has spoken out against the USPTO’s “neglect of administrative law” before, says the case has broader implications, and is indicative of a bigger problem and “pattern” at the USPTO. “In multiple recent rulemakings, the PTO has silently skipped steps, claimed exemptions from these laws for reasons that are transparently false, or claimed to be exempt for reasons having no basis in the written law,” Boundy’s brief explains.
The USPTO first skipped steps under the Paperwork Reduction Act, says the amicus brief. This Act requires agencies to conduct cost-benefit analyses to minimize paperwork burdens on the public, request notice and comment rulemaking, make filings with the Office of Management and Budget (OMB) and Office of Information and Regulatory Affairs (OIRA) and then certify that the agency has taken steps to reduce the paperwork burden. All of these steps result in approval from OMB/OIRA in the form of a control number, explains the brief.
Boundy claims there is no evidence that the USPTO went through this process because such a filing would be listed on the OMB/OIRA website under the control number for trademark applications if it had. While the Final Rule indicates that OMB previously reviewed and approved the collection of information involved in the rule, Boundy says this is false. “The relevant pages at OMB/OIRA’s web site show that the USPTO did not request ‘review’ or ‘approval’ of anything relating to this,” the brief states.
The USPTO further failed to show “practical utility” for imposing the domicile address requirement; made false statements with respect to Chestek’s Petition for Rulemaking, which is incorporated by reference in the TTAB’s decision; and also skipped requirements under the Regulatory Flexibility Act, says Boundy.
Secondly, Boundy argues that the USPTO’s other recent rulemakings “exhibit a repeat pattern of evading rulemaking and administrative law.” The brief cites Dr. Richard Belzer’s comment in response to a 2011 request for input on its regulatory processes and regulations. Belzer, who for 10 years reviewed agency submissions at in OMB/OIRA under the Paperwork Reduction Act and Executive Orders, said:
My general message is unambiguous and uncomplicated. The USPTO is a longstanding, serial violator of established
regulatory principles. This is the product of a bureaucratic culture that treats presidential direction as interference, is
adamantly opposed to basing regulatory decision-making on informed analysis, and has serious difficulty adhering to the rule of law.
Boundy goes on to cite the USPTO’s CLE Rule and the DOCX Rule as additional examples of rulemakings in which the Office evaded standard procedures. In the case of the CLE Rule, Boundy says the USPTO evaded notice and comment by deeming it “subregulatory guidance” rather than a regulation and that it also violated the Paperwork Reduction Act. In the case of DOCX, Boundy claims the Office did not engage in proper notice and comment procedure because it ignored comments that pointed to problems arising from the transition to DOCX, among other issues.
The brief also contends that the Office’s “ordinary meaning” rule, in which it changed the claim construction rule for inter partes reviews (IPRs) from “broadest reasonable interpretation” to ordinary meaning, violated multiple provisions of rulemaking law, and that Patent Trial and Appeal Board (PTAB) precedential opinions have been used as a substitute for rulemaking despite the CAFC’s rulings in Aqua Products, Inc. v. Matal and Facebook, Inc. v. Windy City Innovations, LLC explaining that PTAB decisions do not have the force of law. The brief notes: “In the five years since Aqua Products, the PTAB has issued thirty-four precedential opinions. After the March 2020 Windy City decision, the PTAB designated three more within two weeks. After this Court’s latest opinion on the issue, within a few months the PTAB issued five more.”
Finally, Boundy’s brief says that the USPTO has refused to implement the January 2007 OMB/OIRA Bulletin for Agency
Good Guidance Practices, 72 Fed. Reg. 3432 (Jan 25, 2007), which Boundy claims would “assist the PTO in avoiding unlawful conduct.”
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